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Clarifying Compliance in Finance
In 2002, the Sarbanes-Oxley Act (SOX) established a compliance baseline aimed at enforcing stricter compliance regulations regarding financial services. Since that time, businesses have prioritized staying ahead of the compliance curve by instituting better internal controls and managing their risks.
Facing obsoletion, methods like document decentralization and spreadsheet reliance are rapidly going the way of the dodo. There’s no debate, companies will need to maintain their records better to remain in compliance with accounting standards and tax regulations. Overhauls in international tax regulations now dictate that many companies are subject to increased scrutiny.
Additionally, the terms of new accounting procedures as outlined by the International Financial Reporting Standards (IFRS) are requiring greater transparency when it comes to revenue recognition between buyer and seller.
You can read about these IFRS procedures here.
This redefinition is particularly important to SaaS companies and subscription-based business models. These organizations will need to reassess how they allocate resources to accommodate the compliance protocols. Particularly for smaller organizations, accountants will become more vital than ever in accomplishing a company’s strategic-level objectives. Leaving them to perform repetitive tasks that can easily be completed by automated solutions is simply a waste of precious resources that not all companies have.
With expanding business, often comes greater complexity and more moving parts. More parts necessitate more control measures. But control isn’t free, and based on consistent increases in investment into such controls, companies need to find new ways to manage this effort.
SF Magazine cites technological solutions like robotics process automation (RPA). RPA operates based on rules and can be set to schedule, check, and recheck transactions, all at greater than human speeds. Automated solutions can offer risk mitigation without increasing monetary investments.
These control measures to improve control and mitigate risk will become increasingly vital for finance operations moving forward.
Read the full article “Getting and Better Handle on Compliance and Controls” here.